Think I might have found the problem, if not the solution. I took all of the songs off of my 30GB iPod. Then, in iTunes, I made a playlist of about 300-400 songs with artists from A to Z to 123. I then deleted the "Sort Artist" information from all of the songs in that playlist (so, for example, Frank Sinatra got placed under "F" for "Frank" instead of "S" for "Sinatra"). I loaded the "test" iPod with just the songs from my deleted-"Sort Artist" playlist, then plugged it into my X920BT. It worked perfectly--all of the letter tabs found the appropriate artists.
So, it appears that the AVIC series can't handle songs with "Sort Artist" information in iTunes. If, like me, you like to have your music sorted in true alphabetical order, it appears you have two choices: (1) put the data in the "Sort Artist" field in iTunes, knowing that it will screw with your Pioneer navi unit; or (2) actually rename all of your artists (for example, rename "Frank Sinatra" to "Sinatra, Frank" and rename "The Doors" to "Doors, The"). Neither solution is very satisfactory--this seems like something Pioneer could fix in a software update/bug fix. Anyone out there with connections to Pioneer that can suggest this fix to the appropriate people?